6 Steps to Buying Houses That Are For Sale:
01Knowing the Housing Market
If you are ready to buy a house, the first thing you must know about houses that are for sale is how much money the houses are selling for in that area. This is called knowing the housing market. There are several ways buyers can know the housing market in any location.
Real Estate Agent
First, you could choose the services of a real estate agent to see all of the houses that are for sale & listed on the Multiple Listing Service.
For Sale by Owner
Second, you could shop the 'for sale by owners' for all the private sales. Occasionally, real estate agents will show their buyers listings of houses that are for sale by owner.
Or you can do both, buyers are known to use the service of a real estate agent and privately shop the for houses that are for sale by owner so they can get the best possible deal when they buy a home.
02Using the Services of a Real Estate Agent
The services of a real estate agent can be very beneficial to any buyer who needs to know the housing market. The services that real estate agents provide vary greatly from agent to agent but understanding an agent's basic minimum service requirement will help you to know when you are receiving exceptional customer service or very poor client care.
Interviewing Real Estate Agents
Make a list of services that are personally important to you when you are buying your home, then choose your real estate agent carefully when deciding to view houses that are for sale.
When you meet with a potential real estate agent, ask several questions of your real estate agent so you can be truly comfortable with them and confident in their ability and the services they will provide.
You may have to interview a couple of real estate agents to ensure that the dynamics are right between both parties before you begin looking at houses that are for sale. By interviewing a few real estate agents, it will soon become clear to you what the basic minimum service requirements are and that some real estate agents will provide a higher level of customer service than others.
Once You've Picked a Real Estate Agent
Once the real estate agent and the buyer agree to work together, be prepared that your real estate agent may ask you to sign a document called a Buyers Contract or Buyers Brokerage Agreement.
Most top producing real estate agents use them in today's market and for many of the top producing real estate agents it has become a normal part of their business practice.
Buyer Brokerage Agreement
A buyer's contract is a document that outlines the responsibilities of both the buyer and the real estate agent and the real estate agent's Brokerage. It is a commitment between the buyer and the real estate agent and his/her real estate brokerage.
The commitment is for a specific amount of time and within that time period, the buyer must remain loyal to one particular real estate agent, and the real estate agent must provide all necessary services to help the buyer find the appropriate houses that are for sale and buy a home.
Seek Legal Advice
Before you sign any document make sure you know exactly what it is that you are signing, there is nothing to be embarrassed about or uncomfortable with asking for further clarification. If you are just not sure, you have the option to request legal advice and have your real estate lawyer look it over.
If you don’t have a real estate lawyer you might want to consider choosing a lawyer that best suits your needs and will help you with all of the closing legalities when you buy your home.
However, if you understand your obligations as a buyer within a Buyer's Brokerage Agreement and still refuse to sign it, then look for a real estate agent who is prepared to work with you and won't require that you sign one.
Today, there are many real estate agents in the market place who still don't use buyer's contracts.
03Shopping the For Sale by Owners
The second option to buying your home is to not use any real estate agent's services and shop it alone by purchasing houses that are for sale by owner. All buyers who try to purchase houses that are for sale by owner for sale by owner want to save the real estate commission and get a house cheaper. This is a common public misconception.
What is Market Value?
Market value is the price that a willing seller will sell their home for and a willing buyer is prepared to pay for the home. Therefore, whether you buy privately or with a real estate agent, market value is market value.
Factors that Don’t Affect Market Value
The factors that don't affect the value of a home is what the seller originally paid for the home and/or how much cash the sellers want to get out of the home. Value doesn’t matter if it is listed with a real estate agent or by a for sale by owner.
Most for sale by owners are very educated about the value of their home and most likely they would have a current real estate appraisal providing proof of its value. The only difference is that they are choosing to save paying a commission to a real estate agent and opting to do all the work themselves.
How to Shop For Private Sales
The best place to find private real estate sales is on the internet, on bulletin boards in your local shopping center or by driving around the neighborhoods that you would like to live in. The best time to look for houses that are for sale is on the weekend between noon and four in the afternoon.
Many times the private sellers will be hosting an open house for the purpose to welcome all buyers who are considering living in that location. It is a wonderful opportunity for the buyers to go into the home and ask the sellers about any defects that might affect the value.
Know What You Are Buying When Viewing Houses That Are For Sale
When buyers look at homes with real estate agents, the sellers are not available to answer any questions. When shopping for a private sale, this is an ideal situation for the buyers to speak directly with the seller and ask any questions about the home.
If the buyer knows the correct questions to ask and if the home meets the buyers basic criteria then the buyer could consider taking the real estate process to the next level which would be to the offer stage.
Hiring a Home Inspector
Some things that the buyer should look for when purchasing a home is visible water damage anywhere in the house, the overall condition of the home, and if there are excessive amounts of room deodorizers in the house. If there is an excessive amount of candles or rooms deodorizes this could mean that the sellers are trying to mask an offensive odor such as mildew or pet damage. These are only a few examples where a buyer might consider hiring a certified home inspector to investigate these matters further.
04Wrting an Offer on your Perfect Home
Now that you have found a home that you would like to buy, the next step is to write the sellers an offer to purchase the home. If you are being represented by a real estate agent, your real estate agent will provide a legal document specific to your province or state, which will outline all the information necessary to sell your home.
Where Do I Get an Offer To Purchase?
This legal document is called a real estate 'offer to purchase' or some people refer to it as a 'sales agreement' (Soldplicity will refer to this legal document as an 'offer to purchase' throughout this site). However, if you are not being represented by a real estate agent, you can get your offer to purchase from your lawyer who will provide the most up to date real estate contract that your province has.
Whether you are being represented by a real estate agent or not, the terms and conditions within your offer are very important components and must be clearly understood and agreed to by both the buyer and the seller.
What Terms Should I Write In My Offer?
The terms and conditions of your offer will be 'contingent' or 'subject to' something happening by a certain date. For example, within the real estate industry you might hear that the offer is 'subject to' the buyers financing being approved by a certain date and time. Or you might hear that the offer is 'contingent' to a home inspection being completed by a specific date and time.
When Is The Offer Pending?
Once both parties agree to all the terms and conditions and the offer to purchase is signed by both parties that is called having a 'deal' or an 'accepted offer'. The offer is now 'pending'. It is called pending because there are still conditions or terms that one or both of the parties must satisfy before we can call this property 'sold'.
For example, if the buyer has a certified home inspector come and look at the property that the buyers want to buy and the home inspector confirms that it passes his certified inspection then the buyers can 'remove their home inspection condition'.
The next step is to have both parties co-operate to remove all the remaining conditions so we could work on calling this home sold.
If the terms and/or the conditions of the accepted offer cannot be met by any party then the deal cannot be completed and the accepted offer becomes 'null and void'. Within the real estate industry it is also known as a collapsed deal.
If the buyer and seller respectively can meet all the agreed upon terms and conditions then it is time to remove the conditions and proceed with closing the deal. If the buyer is being represented by a real estate agent, it is the real estate agent's responsibility to complete all necessary paper work and forward it to the correct parties.
How Do I Remove Conditions?
If the buyer is not represented by a real estate agent, the buyer is responsible for removing the conditions and forwarding all necessary real estate documentation to the correct parties. This is an area where most private buyers and private sellers get very frustrated.
The buyers don’t really know what real estate documentation needs to be sent to whom and by when. The sellers can't help the buyers due to privacy laws so the sellers feel very anxious because they just don't know what is happening.
An Important Tip When Trying to Remove Conditions
There are many reasons why conditions within the real estate offer to purchase can't be removed but the most important tip that can be offered is communication. Less and less real estate transactions will collapse if there is considerable communication between all parties.
This does not mean that problems will not come up within a real estate transaction, nor does it mean that some of these problems may be not be insurmountable; it does mean that when all concerned parties communicate effectively the majority of issues will be solved.
This is a very hectic day for both parties, utilities need to be transferred, the home should be vacant and clean, make sure all the manuals and warranty cards are with the appliances, if there is an alarm system make sure that the sellers give the Installers Lock Out Code so it can be used, change mailing address to receive all new mail, and ensure the sellers have left all the keys (garage door opener) to the house.
Complete all legal documents with your real estate lawyer or notary. If represented by a real estate agent, then your real estate agent will call you and assist you with possession day procedures.
If you don't have real estate agent representation, then follow the guidance of your real estate lawyer on possession day protocols.
Congratulations on completing your search of houses that are for sale & the purchase of your new home!